Essay About Market Structuredawn Bakereco And 2015John Bayer Michael’S Arts

Michaels Market Structure
Michaels Arts and Crafts: Market StructureDawn BakerECO/365August 24, 2015John Bayer Michael’s Arts and Crafts: Market StructureMichael’s Arts and Crafts is one of the leading craft supply stores in the United States. There are several other competing craft stores such as Hobby Lobby, Jo-Ann’s Fabric and Craft, and AC Moore. However, Michael’s is the number one craft supply store operating over one thousand stores in the United States as well as in Canada. This paper will discuss the market structure of Michael’s as well as how Michael’s would operate in other market structures. This paper will also discuss competitive strategies used by Michael’s.The Market Structure of Michael’s Michael’s arts and craft store have the market structure of monopolistic competition. According to Colander, Monopolistic Competition is a “market structure in which there are many different firms selling differentiated products and few barriers to entry” (2013). There are many different stores that sell art and craft items, but each store has items that are slightly different. Michael’s sells Studio Décor canvas (Michael’s 2015), whereas Hobby Lobby sells Master’s Touch canvas (Hobby Lobby 2015). Both stores sell canvas, but they are slightly different since different companies make the canvas for each store. Another example explaining why Michael’s market structure is monopolistic competition is that Michaels sells ArtMind brand of wood letters (Michael’s), and Jo-Ann Fabric and Craft sells Darice brand wood letter (Jo-Ann 2015). Both stores sell wood letters in many different sizes, but they are slightly different since different companies make the wooden letters for the stores. Selling the same items, but different brands is what makes the market structure that Michael’s competes in monopolistic competition.Monopolistic Competition vs. other market structures Michael’s arts and crafts market structure is Monopolistic Competition, but there are also three other market structures; Perfect Competition, Oligopoly, and Monopoly. According to Colander, Perfect Competition is a “market in which economic forces operate unimpeded” (2013). In the Perfect Competition market structure, there are many buyers and sellers, but neither can influence the price of the items. In Perfect Competition, all of the businesses that are in the same market structure sell the same items at the same price. An example of Perfect Competition would be if Wal-Mart and Target sold all of the same brands and sold them all at the same price as each other. Let’s say that Wal-Mart is selling Tylenol 80 pill bottles for $5.00 each. For Wal-Mart and Target to be in Perfect Competition, Target would also have to sell Tylenol 80 pill bottles for $5.00 each.